This article gives the data. The deficit will shrink to $500B or less this year. Why? Check out below whether it's growth or austerity.
Answer: growth. The austerity didn't help much. If fact, while the data isn't in this article, it surely hurt in depressed job growth at the state and federal level.
The combination of rising tax revenue and, to a lesser extent, constraints on federal spending are pushing the national deficit down. And soon it could even reach prerecession levels.
So, this takes away a long-standing R talking point and confirms what Paul Krugman has been saying for a couple of years now. Austerity doesn't work. Growth is the way to reduce deficits.
There's also this added bonus re interest rates:
A shrinking deficit means the U.S. Treasury won’t have to sell as much debt, Deutsche Bank senior economist Carl Riccadonna points out. And that lessens the need for the Treasury to raise interest rates to attract buyers.
Yet fewer sales of Treasurys could alleviate the pressure on rates to rise – and keep the recovery on solid ground.